How you can live within your means

| April 12, 2012

Living a financially responsible life denotes living within your budget or your means. It can also be defined as spending for exactly what you need; in other words, frugality. You’ll find several options including credit cards for more spending than what your earnings would allow you. However, you’ll find fewer options for saving. Profligate lifestyle doesn’t sustain for many years and ultimately such a lifestyle will let you owe more and more debts which may be difficult for you to pay off. To avoid such an unwanted situation, it is better that you change your lifestyle and start living within your means.

Ways to cut down spending

Here are some effective techniques to curtail your spending.

  • Know your income potential – You must know your income potential so that you can live within your means. You must know how much you can earn a month as most bills need to be paid on a monthly basis. Curtail your spending according to your income, in order that you can pay your monthly bills in time and without putting much effort.
  • Spend less than what you earn – Once you understand your earning potential, you can focus on cutting down your spending. Make a budget so that you can set some money aside every month.
  • Increase your income – If you’re already living a frugal life and still your expenses surpass your income, then you need to enhance your income. Make sure you’re getting applicable government benefits (if there is any) as well as benefits provided by your employer. Try to get a better paying job or do a part-time job or business after your office hours.
  • Say no-no to credit cards – Avoid using credit cards by all means. Schedule a budget without the help of credit cards; otherwise, you can’t make the ends meat. Using credit cards not only increase the amount of your personal debt, but also can affect your credit, if the credit card debt is not paid off in time.
  • Build an emergency fund – Set aside some money every month to build an emergency fund. An emergency fund of at least 3 months of living expenses would be perfect. It would help you a lot in an unfortunate event of a medical emergency or joblessness.

Frugality is the last word when it comes to living within your means. Without being frugal you can’t get rid of the debt burden and save money to live a debt free peaceful life.

Personal finance related sites www.bankruptcy.org.uk and www.debtmanagement.co.uk.

Category: Finance

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